While good marketing is timely, relevant and compelling, it shouldn't require immediate action.
Financial scams date back to the Roman Empire, when Julianus
tricked the army into buying the throne for a million in gold he never
possessed. Even the great state of Louisiana has been used to defraud investors
and the French government, until people realized they’d spent a life savings on
swampy alligator territory. Bernie Madof’s shenanigans hold nothing to Whitaker
Wright, who similarly had companies that seemed legitimate on paper but were a
house of cards. And, Wright predated Madof by nearly 100 years.
Worse, financial investment shams involving the elderly have
been so much on the rise, that government agencies like the Federal Bureau of
Investigation (“FBI”) note them as one of the top crimes of the current
And the net is wide. A recent FINRA Investor Education
Foundation survey found that more than 8 in 10 consumers have received
communications about financially fraudulent investments. Of those who do fall for the scam, the older
generations are three times more likely to have lost money than others.
Additionally, financial scammers target men more often than women. According to the FBI, financial investment
fraud “involves the illegal sale or purported sale of financial instruments.
The typical investment fraud schemes are characterized by offers of low- or
no-risk investments, guaranteed returns, overly-consistent returns, complex
strategies, or unregistered securities.”
As scams become more complex than a nice note from that Nigerian
fellow, it can be helpful to make sure your marketing materials don’t fall into
any of the red flag areas similar to the financial tricksters. The most basic
may be what you are already doing. Many consumer protection advocates urge
consumers to verify that a financial advisor is licensed, so ensuring that your
communications always indicate your licensing is vital. Cold Calls and
Telephone scams continue. Even though you’d think most folks are savvy enough
to not make friends with strangers selling investments on the phone, people
still get lured in. Be clear in your
phone calls, if necessary.
Obviously none of your marketing materials to your clients
or their employees will involve transferring large sums of cash into their
accounts to be held for a relatively short period time for international
strangers. However, free lunches to learn about investment opportunities that
may be ponzi or pyramid schemes are common now.
So too are free lunches for investment products pitching high returns.
If you are providing free lunches on a regular basis to your client’s
employees, it may be helpful to keep the topic to educational materials or
This also goes for avoiding “the next big thing.” While it may be helpful to use a relevant new market to ensure that your communications are relevant, like clean energy investment or work share investment groups, take note that financial scammers too are pitching on similar topics. Other common scam topics include private securities offerings for companies about to go public as well as utility companies. Additionally, financial scams often involve rushed or hurried opportunities. While good marketing is timely, relevant and compelling, it shouldn’t require immediate action by a client or their employee. Make sure that your call to action at the end of your newsletter aims more towards thoughtful action than harried response.
When communicating with clients or their employees about
funds and payments, be clear about how to direct funds into accounts. Many
scams involve depositing checks into new accounts or setting up automatic
withdrawals. Similarly, phishing scams still exist seeking confirmation of
banking account information by fake banks or fake companies. Many consumer advocates urge the public to
avoid: clicking links in an email to verify an account (unsolicited), verifying
account information over the phone (unsolicited) or accepting checks for more
than the anticipated amount without previous information.
Tax schemes are also still abundant. If you need to
communicate about potential tax implications of a change in accounts or a
change in an employee’s status, for example, an employee over the age of 70.5
might need to discuss required minimum distributions from certain accounts, be
careful to avoid how financial scammers communicate, to ensure confidence by
your clients and employees. Consumer advocates suggest avoiding IRS and tax
scams that urge immediate action and also those that request verification of
accounts, as discussed above, but also involve any threats of penalties.
Redemption and straw man bond schemes are still occurring.
Those schemes involve official sounding forms, like bills of exchange and
promissory bonds, or IRS forms like 1099s to add legitimacy. The scheme sells
the idea that there are government bonds and secret accounts “out there” that
merely need a kit of papers to cash in on.
When communicating about bonds or funds of bonds, it may be helpful to
keep in mind that your client’s employees may be receiving these scam messages
and might need clarification.
Scams specific to seniors include all of the above, but notably, also include financial abuse by their own family members. Almost 90% of elder financial crimes are committed by close family members of the older person. It could be helpful to ensure that your systems are set up to only give financial information or access to it to the individual with financial power of attorney, especially for clients with a significant number of retirees on their plan.
Before leaping into the unknown, we recommend a thorough examination of your plan. Because we are experts in the field, we know the marketplace and know what your existing vendor is capable of offering. Through this examination, we can help you optimize the service you receive.get xpress proposal